Last night, President Obama presented Congress and the American public with his economic stimulus plan that he says will help put the country on the road to recovery. There was much tough talk, but it was always tinged with a sense of optimism and Obama's belief in what America can do.
The President discussed a variety of topics related to his recovery plan, such as initiatives in healthcare, energy and education. However, he had some especially harsh words reserved for the financial services industry executives, assuring them the days of getting bailout money for nothing were over. Obama hammered home the message that banks would be "held accountable" for the money they received from taxpayers and on how that they were using it to increase lending.
Yet Obama expressed his confidence in the banking system itself, reassuring Americans that their money was safe in the nation's banks. What he said was of concern to him was the credit crisis. For Obama, there will be no recovery "unless we clean up the credit crisis. If banks don't restart lending, the country's recovery will be cut off before it begins. The flow of credit is the lifeblood of this country."
To remedy the situation, Obama outlined a plan that calls for the creation of a new fund for automobile, college and small business loans. He also reiterated how his new housing plan would only help "responsible families"—not "speculators"—facing foreclosure by helping them obtain loans with lower interest rates.
"This is not about helping banks—it's about helping people," he proclaimed.
Without getting too specific, Obama also stated he wants to see legislation designed to overhaul the outdated regulatory structure in this country. "It is time to put in place tough, new, commonsense rules of the road," he said, challenging Congress.
The President also tried to calm fears of big government by taking a bigger picture, historical look at the current crisis. Harkening back to the upheavals of the Industrial Revolution, the Civil War, the Great Depression and both world wars, Obama said government didn't "supplant private enterprise." Rather, he told people to think of the government as having acted as a catalyst that helped private industry bring about new prosperity and innovation.
One final point indirectly related to the financial services industry was Obama's proclamation that he would end tax breaks for companies that send jobs overseas. What this could mean for banks, typically some of the greatest proponents of offshoring, remains to be seen.